EWJ FEB 59 2025 web - Flipbook - Page 46
Transaction Disputes: Party
Expert, Single Joint Expert or
Expert Determiner?
The heightened transaction dispute climate
In the lead up to the UK Government’s autumn
budget announcement on 30 October 2024, the
mergers and acquisitions (“M&A”) sector went into
overdrive, with buyers and sellers of companies anxious to get deals completed ahead of a widely predicted hike in capital gains tax (“CGT”). This
forecasted CGT rate increase did indeed transpire,
with 4% to 8% uplifts introduced depending on the
circumstances, meaning that those who managed to
complete deals by 30 October 2024, were relieved
that they were able to crystallise their tax liabilities at
the lower CGT rates applicable prior to this date.
that have possibly taken place with less input fromprofessional advisors than is normally necessary.
In this article, we examine the different ways in which
a forensic accounting expert can become involved in
a transaction dispute, including an assessment of the
pros and cons of each, from the perspective of
claimants and defendants.
Party expert witness in a litigated commercial
dispute
Party expert witness, acting for either buyer or seller,
is probably the most traditional role of a forensic accounting expert in the context of transaction disputes.
This role is typically required where there is a warranty or misrepresentation claim, whereby an aspect
of the claim requires technical accounting opinions,
investigations or an assessment of the quantum of loss.
It is likely that many M&A transactions were hurried
during September and October 2024, given the drive
to meet this fixed backstop date, and Crowe’s article
https://www.crowe.com/uk/insights/mergers-and-acquisitionstransactions-2024 2025: The year of M&A transaction
disputes, examines the potential problems caused by
proceeding at an accelerated pace. In summary,
Crowe are predicting a significant increase in completion account, earn-out account, warranty and misrepresentation disputes, given the volume of deals
The forensic accounting expert will provide an
impartial expert witness report, in accordance with
Part 35 of the Civil Procedural Rules, setting out their
opinion as to the relevant accounting matters.
Pros
Cons
• The claimant / defendant has complete control
over who they appoint as expert.
• Likely a longer process, as both parties usually submit
expert evidence, not always simultaneously, often followed by an experts’ joint statement.
•The expert will be able to advise as to the strengths
and weaknesses of the accounting aspects of the claim
under legal privilege.
•The expert might identify helpful accounting
evidence to use, that may not have previously been
considered.
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• Likely more expensive, as the experts costs are all
borne by their instructing party.
• One can never be certain which side’s expert
evidence the Court will prefer.
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